Barclays chief executive Bob Diamond should not be paid “any bonus at all”, a
leading investor group has said, helping to fuel an escalating rebellion
against pay at the bank.

Pensions & Investment Research Consultants (Pirc) has advised institutional shareholders and pension funds to vote down Barclays’ remuneration report, claiming the pay plan is inappropriate given the performance of the bank.

In its detailed advice to shareholders, seen by The Daily Telegraph, Pirc argued: “In view of the fact that Barclays’ shares are trading far below net asset value, we cannot think of any circumstances in which a chief executive who was part of a team when the bank got into this predicament should be receiving any bonus at all, indeed the board should also be considering clawbacks itself.”

The strongly worded note adds to the views of some of Barclays’ biggest investors who are already planning to vote down the bank’s remuneration report.

The Sunday Telegraph revealed Standard Life, Fidelity, Aviva and Scottish Widows are preparing to protest against the pay of Mr Diamond, who was awarded a total package of £17.7m. Between them, the shareholder quartet account for 6.45pc of Barclays’ share register.

Investors who argued that Barclays’ 6.6pc return on equity in 2011 was “unacceptable” have voiced concern over pay and bonuses at the bank at meetings in recent weeks.

The mood is pointing to a stormy public showdown with Mr Diamond at the annual meeting on April 27.

Pirc said the chief executive and the board do not deserve big rewards after the bank was fined for mis-selling payment protection insurance (PPI).

The note says that since Lloyds Banking Group clawed bank bonuses from its executives in the wake of the PPI fines, “clawback is also appropriate here.”

Shareholders should vote down the re-election of Alison Carnworth, head of the remuneration committee for her role in approving the plan, the shareholder group said.

Pirc also attacks Barclays’ decision to pay Mr Diamond £5.75m to cover a ‘tax equalisation’ charge: “An argument for high levels of executive remuneration is that there is a going rate for international executives which includes their need to move from their normal domicile. If that is the case, then any differential tax (due to relocation) should already be reflected in the going rate for the job.”

The group added: “Any bonus including compensation for the differential tax rates is evidence of the inappropriateness of a scheme that delivers such a result in such circumstances.”

Barclays has often argued that its pay schemes should not be criticised in the same way as those of the Royal Bank of Scotland or Lloyds Banking Group because it was not rescued with taxpayer funds.

However, Pirc said: “Although the bank has not failed in the classic sense, trading below net asset value is an investment failure from the perspective of the shareholders.”

Pirc has also called for investors to vote against the re-election of Sir Mike Rake as chairman of

the audit committee and Price-waterhouseCoopers as the bank’s auditors.